Browsing by Subject "Audit quality"

Now showing 1 - 11 of 11
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    An exploratory study of the pressures and ethical dilemmas in the audit conflict
    (2016) Espinosa-Pike, Marcela; Barrainkua, Itsaso
    The present study analyzes the pressures perceived by auditors in their professional activity. Furthermore, it explores the ethical acceptability of questionable practices and the way auditors resolve the conflicts of interest with which they are confronted. This paper also studies the influence of the size of the audit firm and the experience of the auditors on the perception of pressures, their ethical judgment, and the way of resolving conflicts of interest. Data were collected through a questionnaire administered to auditors from small and medium-sized audit firms in Spain, members of REA (Registro de Economistas Auditores). This study contributes to the international academic literature on auditing behavior, as it provides new empirical data on the pressures perceived, not only those from the audit client, which have been extensively studied in the academic literature, but in addition, it highlights pressures arising from the audit firm itself that could also have a detrimental effect on the audit quality. It also contributes to the understanding of the effect of these pressures on the behavior of auditors. The results of this study are also of particular relevance for the legal and professional Spanish auditing regulators as they face, at this moment, the challenge of developing a set of ethical standards that should improve the ethical judgment and behavior of accounting professionals.
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    Analysis of the effects of changes in Spanish auditing regulation on auditquality and its differential effect depending on the type of auditor
    (2019) Cabal-García, Elena; De-Andrés-Suarez, Javier; Fernández-Méndez, Carlos
    The objective of this paper is to provide evidence on the effect of the reforms of the Spanish auditing legislation, enacted in 2002, 2010 and 2015, on audit quality. More specifically, we study whether the reforms had a differential effect depending on the type of auditor. To this end, the auditors were classified according to their size. We analyzed the specific case of non-financial listed Spanish companies which are considered as Public Interest Entities (PIEs). The main results indicate that none of the reforms caused an improvement in financial reporting quality. This could mean that legal reforms per se are not sufficient to achieve the intended objectives in countries with weak legal enforcement, as is the case of Spain. Because of this, it may be necessary to implement mechanisms to encourage auditors to apply the new rules.
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    Audit Risk Management and Audit Effort in Small and Medium Audit Firms
    (Universidad de Murcia, Servicio de Publicaciones, 2024) Ruiz-Barbadillo, Emiliano; Martinez Conesa, Isabel; Serrano-Madrid, José; Brown-Liburd, Helen
    El objetivo de este trabajo es analizar las decisiones de planificación de la auditoría de las pequeñas y medianas firmas de auditoría españolas en relación a la evaluación del riesgo y el esfuerzo de auditoría. Las investigaciones previas se centran casi en exclusiva en las 4 firmas de auditoría grandes y poco se sabe sobre cómo las decisiones de planificación de la auditoría influyen en el riesgo de auditoría en las firmas más pequeñas, una parte muy significativa de la profesión auditora. Por lo tanto, es importante examinar los juicios de planificación en firmas de auditoría pequeñas y medianas y el vínculo entre las evaluaciones de riesgo de planificación y el grado de esfuerzo realizado para lograr un nivel aceptable de riesgo de auditoría. Usando datos derivados de bases de datos disponibles públicamente y datos obtenidos a través de encuestas, este estudio investiga los factores que explican la evaluación del riesgo de error material del cliente y si el esfuerzo aplicado en el desempeño del trabajo de auditoría responde efectivamente a ese riesgo. Encontramos una relación estadística significativa entre el riesgo de auditoría y el esfuerzo de auditoría, lo que proporciona evidencia empírica de que los auditores modifican el alcance del esfuerzo de auditoría en función del riesgo de auditoría percibido y pone en debate el trabajo de las pequeñas empresas. El análisis adicional muestra que el esfuerzo de la auditoría, medido a través de las horas, está significativamente influenciado por la antigüedad del encargo y el momento del trabajo de auditoría (es decir, la temporada alta de auditoría). Sin embargo, los trabajos de auditoría con una antigüedad más larga no ajustan su esfuerzo de auditoría en respuesta a una baja integridad de la administración o controles internos débiles, lo que sugiere familiaridad, esto es, los auditores pueden no ser tan escépticos con respecto a los incentivos de la administración. Este articulo contribuye al debate sobre la calidad de la auditoría y si el tamaño de las firmas de auditoría sirve como una característica observable asociada con una mayor calidad de la auditoría.
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    Auditor tenure and audit quality in Spanish state-owned foundations
    (2015) González-Díaz, Belén; García-Fernández, Roberto; López-Díaz, Antonio
    This paper aims to analyze the impact of auditor tenure on audit quality. The research is motivated by the absence of consensus in published works, and by the scarcity of studies carried out on non-profit organizations. Using a sample of 254 audits carried out between 2003 and 2010 on Spanish state-owned foundations, we find that, although foundation audit quality decreases as tenure length increases, this quality loss does not become apparent until the sixth year of the foundation–auditor relationship, after an initial five years of improvement in quality. The empirical evidence is important for regulators and financial statement users, given that it suggests the need for the introduction of tenure-reducing measures which, at the same time, also ensure a minimum tenure period.
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    Do auditors mitigate earnings manageme nt during economic crisis?
    (2019) Reguera Alvarado, Nuria; Fuentes, Pilar de; Laffarga, Joaquina
    This paper addresses earnings management from an international perspective. This study particularly ana-lyzes whether external auditing reduces earnings managements and, if so, whether this relationship isaffected by the economic crisis. The study employs a cross-country approach. The sample has 3,830 obser-vations from listed firms from the United States, the United Kingdom, Japan, Italy, France and Spain duringthe period 2005–2009. Panel data are used to verify the research hypotheses. The findings show that ex-ternal auditing is an important mechanism to minimize earnings management. In this sense, the Big Fourand auditor specialization helped to reduce earnings managements during the economic crisis. Moreover,long audit tenure does not contribute to mitigating discretionary accruals. The study includes implicationsfor academia, practitioners, and policymakers. It provides the literature with complementary evidence onthe external auditing and earnings management relationship and how this is influenced by the economiccrisis. The article benefits practitioners and policymakers by highlighting the most important character-istics of audit firms related to the mitigation of earnings managements. In addition, this study considersthe recent economic crisis as an important economic factor. Given that the crisis affected most countriesaround the world and caused structural changes within companies, information about the consequences ofthe crisis and how to deal with them is an important empirical question.
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    Do Industry Specialist Audit Firms Influence Real Earnings Management? The Role of Auditor Independence
    (Universidad de Murcia, Servicio de Publicaciones, 2023) Al-Qadasi, Adel Ali; Baatwah, Saeed Rabea; Ghaleb, Belal Ali; Qasem, Ameen
    In this study, we provide empirical evidence on how the relationship between industry specialist auditors and real earnings management (REM) is moderated by the auditors’ independence. From a sample of Malaysian listed companies for the period 2009 to 2016, the results indicate that companies with specialist auditors are less likely to practise REM. However, this negative association is less pronounced when the independence of the specialist auditor is low, suggesting that the presence of economic bonding between the specialist auditor and the client may allow the auditor to become sufficiently lax to align with the interests of an economically important auditee. Our findings remain robust after controlling for endogeneity and self-selection bias and performing several further analyses. This study is the first to prove that auditor independence can moderate the effectiveness of industry specialist auditors in mitigating REM practices. The results have implications for policy makers to enhance the current regulation structure of auditing and accounting professions. The results also provide new insights into the association between audit quality, REM and auditor independence in an emerging economy.
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    El efecto de la rotación de socio en la calidad de la auditoría
    (2018) Gómez Aguilar, Nieves; Biedma López, Estíbaliz; Ruiz Barbadillo, Emiliano
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    ¿Influye la calidad de la auditoría en la gestión de resultados en los mercados emergentes? Evidencia de Jordania
    (2020) Almarayeh, Taha Suleiman; Aibar-Guzmán, Beatriz; Abdullatif, Modar
    Este estudio investiga si algunos atributos de la calidad de auditoría son capaces de restringir la manipu-lación de resultados en un país en desarrollo, Jordania, cuyo contexto cultural, económico e institucionales muy diferente del contexto de los países analizados anteriormente. Se usó la regresión de mínimoscuadrados generalizada (GLS) para estudiar la asociación entre dos atributos de la calidad de auditoría(tamaño del auditor y honorarios de auditoría) y los ajustes por devengos discrecionales, como proxy dela manipulación de resultados, para una muestra de empresas industriales que cotizan en la Bolsa devalores de Amman durante el período 2012 - 2016. Los resultados son consistentes con la expectativade que en los países emergentes la auditoría externa puede funcionar de manera diferente a la de lospaíses anglosajones y de Europa occidental con respecto a su papel en la restricción de la manipulación deresultados e indican que, dado el entorno institucional en Jordania, el tamaño del auditor y los honorariosde auditoría no tienen un efecto significativo en la manipulación de resultados. Este estudio proporciona alos lectores información sobre si y cómo el entorno institucional influye en la relación entre la calidad dela auditoría y la manipulación de resultados. Además, presenta nueva evidencia sobre el efecto moderadordel nivel de los honorarios de auditoría en su relación con la manipulación de resultados. Los resultadosde este estudio podrían proporcionar información valiosa a los reguladores, tanto en Jordania como enotros países con un entorno económico e institucional similar, para prevenir las prácticas de manipulaciónde resultados.
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    Learning by Doing? Partners Audit Experience and the Quality of Audit Services
    (2020) García-Blandon, Josep; Argilés-Bosch, José María; Ravenda, Diego
    Despite evidence suggesting that specialised knowledge should be more relevant than generic knowledge to explain different levels of audit quality across individual auditors, no study to date has addressed the respective impacts of the industry-specific and the generic audit experience of audit partners on the quality of audit services. Our study investigates this issue in the Spanish audit market. We proxy audit quality by discretionary accruals and by the opinion of the audit report, and differentiate among client-specific experience, industry-specific experience and generic audit experience of individual auditors. As expected, our results show significantly higher audit quality when the client is audited by a partner with stronger industry-specific audit experience. Furthermore, we observe that neither client-specific experience nor generic audit experience of audit partners are significant determinants of the quality of audit services provided by these auditors. These results may have some interesting implications for audit firms. Therefore, whereas some prior studies on the related issue of industry specialization point out that specialised knowledge is more relevant than generic knowledge to explain the quality of audit services, our findings suggest that specialised knowledge is, in fact, the only type of knowledge that seems to matter.
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    El origen de ingresos del auditor y calidad de la auditoría : el caso español
    (Universidad de Murcia, Servicio de Publicaciones, 2022) Serrano-Madrid, José; Bustos-Contell, Elisabeth; Porcuna-Enguix, Luis; Labatut-Serer, Gregorio
    Estudios previos señalan la existencia de una relación entre la especialización del auditor y la calidad de la auditoría. A partir de esta idea, cuanto más importante sea la actividad de auditoría en el total del negocio de la firma auditora y mayor especialización exista en dicha actividad, el auditor firmante adoptará una postura más conservadora en la emisión de su informe. Utilizando la materialidad cuantitativa como subrogado de la calidad, se examina el efecto que los honorarios por otros servicios distintos a los de auditoría y el peso de los socios firmantes en la firma tienen sobre la cifra de materialidad. Partiendo de la materialidad real utilizada en cada uno de los encargos como medida de calidad de la auditoría y a través de una muestra de 995 clientes-año de compañías españolas no cotizadas, se concluye que una mayor dedicación a trabajos distintos a los de auditoría lleva al auditor a aplicar unas cifras de materialidad más altas. Los resultados también muestran que las firmas de auditoría usan materialidades más altas cuando los socios firmantes de la firma de auditoría ganan representación, reforzando la idea de un risky shift. Los hallazgos de este estudio son consistentes con la corriente de estudios que afirma que existen otros factores además de los cuantitativos que afectan a la fijación de la cifra de materialidad. Este trabajo contribuye a esta corriente mediante datos de archivo que reflejan el comportamiento del auditor durante la determinación de la cifra de materialidad cuantitativa y sus implicaciones en la divulgación de información financiera.
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    The geographical factor in the determination of audit quality
    (2012) Duréndez Gómez-Guillamón, Antonio Luis; Maté Sanchez-Val, Mariluz
    The aim of this research paper is to analyze the role of the spatial factor in the determination of audit quality. Concretely, we hypothesize that audit quality is influenced by location and by the existence of spill-over effects generated by two factors: (1) the specialization and reputation of auditing firms and (2) the economic and institutional development of the audit firm’s location. We developed an empirical research to test the existence of such spatial effects (location and spill-over) on a representative sample of the Spanish audit market. The study includes spatial econometric techniques taking into account the auditee specific characteristics, as well as other external factors. The findings highlight the relevance of including the spatial dimension when the audit quality is being studied. The results confirm the existence of a location effect according to the highest quality values are found in the most developed Spanish areas. Furthermore, we find a spatial spill-over effect among regions, affecting audit quality values. This effect confirms that audit quality within a location spreads to its surroundings. The results support the promotion of governmental policies leading to improve audit quality considering the spill-over effect